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Useful Stats: Business R&D Intensity by State

August 18, 2016

National business R&D intensity, as measured by business R&D expenditures as a share of gross product, increased by 6.6 percent from 2010 to 2013, according to SSTI’s analysis of recently released National Science Foundation (NSF) data. In total, business R&D intensity was nearly 1.9 percent in 2013, up from less than 1.8 percent in 2010. The states where business R&D expenditures were the largest share of gross state product were California, Massachusetts, and Delaware, while business R&D intensity grew the most from 2010 to 2013 in Washington, D.C., Maine, and Kentucky.

Last week, SSTI highlighted recently released NSF data on private R&D expenditures in the United States for the year 2013. While this business R&D data is valuable from an absolute perspective, more comparisons can be made by viewing business R&D intensity – business R&D expenditures as a share of gross state product.  A high share suggests that firms in a state are investing more in research and development relative to the overall state economy, while a low share suggests that firms are not investing as much in R&D.

To conduct this analysis, SSTI used data from the NSF’s National Center for Science and Engineering Statistics’ Business R&D and Innovation Survey (BRDIS). Data on gross state product comes from the Bureau of Economic Analysis.

In total, business R&D intensity was 1.9 percent in 2013. The states where business R&D expenditures were the largest share of gross state product were California (4 percent), Massachusetts (4 percent), Delaware (3.8 percent), Michigan (3.7 percent), and Washington (3.7 percent). Business R&D expenditures were the smallest share of gross state product in Wyoming (.07 percent), Alaska (.08 percent), Louisiana (.15 percent), Mississippi (0.2 percent), and Montana (0.2 percent).

Nationally, business R&D intensity increased by 6.6 percent from 2010 to 2013. Business R&D intensity grew the most in Washington, D.C. (93.2 percent), Maine (40 percent), Kentucky (30.6 percent), North Carolina (29.1 percent), and Utah (25.8 percent) from 2010 to 2013.  Overall, R&D intensity decreased in 24 states from 2010 to 2013. The states experiencing the largest decreases were Montana (44.5 percent decrease), Alaska (43.7 percent decrease), North Dakota (35.8 percent decrease), Wyoming (30.6 percent decreases), and Nevada (30.1 percent decrease). Many of these large decreases are a result of a state’s gross product far outpacing its business R&D expenditures. This was especially true in highly productive energy-oriented economies. 

As reflected in the map above, growth in business R&D intensity has been especially robust in the Midwest and Northeast. With the exceptions of Florida, North Carolina, and Tennessee, Southern states ranging from South Carolina to New Mexico experienced decreases in R&D intensity from 2010 to 2013, as did energy intensive Northern states. Additionally, each of the states that border the Mississippi River to the west (Minnesota, Iowa, Missouri, Arkansas, and Louisiana) experienced declines in business R&D intensity from 2010 to 2013.

Data on business R&D intensity from 2010 to 2013 has been assembled by SSTI and can be viewed in the table below. The data is also available for download as an excel file linked at the bottom of the page.

File 081816.xlsx